So, the recession continues and things only seem to be getting marginally better. For marketeers the time has now come for decisions to be made. No longer can brands simply do nothing, and wait and see what is going to happen. If they are to survive and grow over the next year, they have to take action.
But what action should they take?
Do Something Different
The first thing to realise is that whatever we do, it needs to be different. Different, not just for the sake of it, but because the world is now a different place, and it will never be the same again. People can be heard talking about ‘when things get back to normal’, but this is simply not going to happen. The recession has irrevocably altered the landscape and the way consumers think and feel has changed, and they are going to need more compelling reasons to part with their well-earned cash. So, doing what we have done in the past is not going to work.
Don’t Trade on Price
There is a natural and understandable tendency to trade on price in hard times. The fact that budgets are tight and people are spending less, leads us to believe that if we reduce our prices we will get more business or sell more products.
In fact the reverse is true. Recession has a well documented psychological effect on consumers, which is that given they have less money to spend, they make sure they spend what they do have wisely. People want to know that what they buy is of good quality and will last. In short, people will spend less overall, but more per item, because they want to be assured that their money is well spent. In addition, whilst a reduction in cost might have some positive affect on short-term sales, once the price has been lowered it is extremely difficult to raise it again. And remember, there won’t be a magical moment when we will be able to say “things are back to normal now so I’ll put my prices back up”. It just doesn’t work that way. If necessary reduce your costs, rationalise the range or look at new channels, but you should always maintain your prices.
Deliver Value
We have just been through 10 years of good times, and this has made us lazy in our marketing. Because business has been good we have not really had to think hard about how to attract customers, and have for the most part used price as the main marketing lever. Remember all those 2 for 1, and Buy 1 Get One Free offers? Well the good times have gone and we are now going to have to be a little more intelligent about how we persuade customers to buy our products and services. We are going to have to offer real value. And that means we are going to have to find out what that value is.
For example, Red Funnel Ferries who run a service from the mainland to the Isle of Wight, realised that their customers wanted the convenience of a one-stop-shop. So Red Funnel developed their offering so that customers can now book their ferry ticket at the same time as booking their accommodation, reserving a restaurant table and even buying a ticket to an evening concert. They added value. And as a result their market share over the last year has increased.
Differentiate
When people have less money they don’t stop spending altogether, they just become more discerning. And when people are more discerning, they are harder to influence and persuade. But that is a marketeer’s job. If the product or service you offer is pretty much the same as everyone else’s in your market, then you are going to make your job even harder. You need to give people a real reason to choose your product or service over the competition. You can do this by differentiating your brand and making it clear what the point of difference is. This means you need to think from the customer’s point of view – find out what it is they want, and adapt your offering to provide it. It sounds simple enough but many of us have forgotten to do it and are busy marketing whatever it is we have got. ‘My company makes T-shirts, so I will market T-shirts”. That’s the job of sales. What about range, size, quality, delivery, fashion, colour, etc. These are all areas where you could potentially differentiate.
In summary
There is no one-size-fits-all answer to marketing out of a recession, other than the fact that we do need to do something and not bury our heads in the sand and hope it all goes away and gets back to normal. We need to use our brains a little more than perhaps we have done over the last few years and start to really think about our customers and what they want. It is, after all, our job.